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TMI Blog2017 (10) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... t by : Sh. Rahul Dhawan ( D. R. ) Respondent by : Sh. Ashray Sarna ( C. A. ) ORDER Per Bench : These are three appeals filed by revenue against the orders of Ld. CIT(A), all dated 21.12.2016 for Asst. Year 2009-10, relating to three different assessees. Common issues are involved in these appeals and these were heard together and therefore for the sake of convenience, a common and consolidated order is being passed. The common ground taken by revenue in these appeals is the action of Ld. CIT(A), by which he has deleted the additions made by Assessing Officer u/s 69B of the Act. 2. The assessees has also filed cross objections to the appeals filed by revenue and has taken similar grounds of appeal where by the assessees has challenged the reopening of the cases u/s 148 of the Act. 3. At the outset, the Ld. AR submitted that he will not be pressing cross objections therefore the same may be treated as withdrawn. 4. The Ld. DR had no objection to withdrawal of cross objections and therefore the cross objections filed by assessee are dismissed as withdrawn. As regards the issue under appeals, the Ld. AR submitted that the issue under appeals is duly covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- and therefore Assessing Officer made an addition of ₹ 183,09375 as unaccounted and undisclosed investment u/s 69B of the Act, similar was the position in the case of Smt Supreet Kaur where Assessing Officer on the same basis made an addition of ₹ 18,30,9375/-. 7. Aggrieved with the additions, the assessees filed appeals before Ld. CIT(A) and Ld. CIT(A) vide separate orders deleted the additions made by Assessing Officer by following the judgments of the Hon'ble Amritsar Bench of Tribunal in the case of Sh. Kulwinder Singh and M/s Harman Builders Pvt. Ltd. and where on similar facts and circumstances, the Appeal of the revenue was dismissed. The Hon'ble Tribunal in the case of Sh. Kulwinder Singh and M/s Harman Builders Pvt. Ltd. has reproduced the orders of Ld. CIT(A) and after reproducing the same has dismissed the appeals filed by revenue by holding as under: 7. We have heard the rival contentions and have perused the material available on record. We have also gone through the very detailed and order of the ld. CIT(A), who has discussed each and every aspect of the matter and has found that the findings given by the ld. CIT(A) based on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equential sale of land by M/s PISCO Ltd. The Assessing Officer has clearly observed in the assessment year that the sale consideration as recorded in the seized copy of agreement of sale has been taken for the purposes of comparative rate at village Birring only and the land purchased by the appellant was different than the one mentioned in the impugned seized documents. This issue has been clarified by the Assessing Officer at para 4.6 in the assessment order. This further underlines the basis of Assessing Officer's presumption Here it is important to consider the facts of the case in the light of Judicial Pronouncements in similar cases wherein the documents relied upon by the Assessing Officer had been seized in the case of third arties. The documents to be relied upon have to be extremely clearly specific and descriptive enough to establish the factum of passing on if unaccounted sale consideration for transfer of property in question. the documents seized in the case of M/s PISCO Ltd only create a doubt or suspicion which cannot take the place of the evidence as has been held in the catena of judgments, some of which are as under:- DCIT Vs. D.N. Kamani (HUF) 70 ITD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed- Remand of the case not called for-Power of remand under s. 254 is required to be exercised in a disciplined and responsible manner-Same cannot be invoked in a case where AO has not cared to follow the basic provisions of s. 69/69B. 13. The decision of the jurisdictional ITAT Amritsar in the case of ITO vs. Sh. Surinder Singh is directly on the similar facts as certain documents seized from the third party M/s Dreamland Co-operative which was seller in said case and the documents in question had recorded certain amounts received by M/s Dreamland Co- operative Society from the assessee on account of sale of flat. It is further to be noted that Sh. Rakesh Kumar C/o Dreamland Cooperative Society had given statement to the effect that amount had been received from the assessee. However a mere presumption that sale deed was registered in the impugned assessment year would not mean that cash payment was also in the same year. The presumption available u/s 132(4A) was not available in the case of the assessee as no documents had been seized from his possession. The Hon ble Court held as under: The only piece of paper which is computerized 04.07.2007 seized from a third pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or otherwise which could prove that consideration over and above the registration deed had been passed on from buyer to seller. The evidence relied upon by the Assessing Officer in the instant case represents a photocopy of an agreement to sell with regard to a deed between two other persons in respect of different piece of land and on a different date. The Assessing Officer on the basis of the said seized documents, which has been denied by all the constituents mentioned therein, could definitely make a presumption on sale price being higher than what was stated in the registration deed by the appellant. However, the said presumption has to be backed up by the some evidence of transfer of such consideration from the buyer to seller. The appellant alongwith seller had been subjected to search operation within the meaning of section 132 of the I.T. Act 1961 but no such evidence could be found to be existing. This means that the presumption of the Assessing Officer eventually remains a presumption and therefore can not substituted in place of evidence i.e. essential requirement to unsettle the sale consideration as recorded in the registered documents. It is also important to appreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely provides a statutory best judgment assessment of the consideration actually received by the assessee and brings to tax capital gains on the footing that the fair market value of the capital asset represents the actual consideration received by the assessee as against the consideration untruly declared or disclosed by him. 15. The said judgment of Hon'ble Apex Court has been consistently followed various High Court and Tribunals on the issue of understatement of sale consideration in respect of cases following under the Income Tax Act, 1961. For instant the Hon'ble Delhi High Court in the case of CIT Vs. Smt. Suraj Devi 328 ITR 604 held as under:- It is settled law that the primary burden of proof to prove understatement or concealment of income is on the Revenue and it is only when such burden is discharged that it would be permissible to / upon the valuation given by the DVO. In any event, the opinion of a DVO, per se is not an information and cannot be relied upon without the books of account being rejected which has not been done i the present case. Moreover, in the present case, no evidence much ass incriminating evidence was found as a result of the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any oral agreement or statement would be admissible as between the parties to any such instrument for the purposes of contradicting, varying, adding to or subtracting from its terms. According to illustration 'b' to section 92 if there is an absolute agreement in writing between the parties where once has to pay the other a principal sum by specified date then the oral agreement that the money was not to be paid till the specified date cannot be proved. Therefore, it follows that no oral agreement contradicting/varying the terms of a document could be offered. Once the aforesaid principle is clear then ostensible sale consideration disclosed in the sale deed dated 24th Sept., 2002 has to be accepted and it cannot be contradicted by adducing any oral evidence. Therefore, the order of the Tribunal does not suffer from any legal infirmity in reaching to the conclusion that the amount shown in the registered sale deed was received by the vendors and deserves to be added to the gross income of the assessee. 18. The Hon ble High Court of Rajasthan in the case of COMMlSSIONER OF INCOME TAX vs. BHANWARLALMURWATIYA , reported in (2008) 215 CTR (Raj) 489, held:- The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above what is stated in the sale deed, addition could not be made by disregarding the 'full value of the consideration' declared by the assessee simply because another portion of land has been sold by the assessee along with his brother at a higher rate, 21. The Hon'ble Madras High Court in the case of Sivakami Co. Pvt. v. CIT (1973) 88 ITR 311 (Mad) has held that the burden of proving that certain sales were effected with the object of avoidance or reduction of tax on capital gains is on Revenue and it is not enough in 3 explanation offered by the assessee was not acceptable and there e strong suspicion as to the real motive, which prompted the ssessee to sell the assets. There must be something positive to suggest that the sales were effected with the object of avoidance or reduction of tax liability for capital gains and this was affirmed by Hon'ble apex court in (1986) 159 ITR 71 (SC). We are of the view that unless there is evidence that more than what is stated in the documents or was received, no higher price can be taken to be the basis for computation of tax either in business transaction or capital gain transactions. The entire onus is on Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is evidence on record to suggest that amount over and above the one recorded in the registered documents had passed on from the buyer to the seller. 23. The Hon'ble High Court of Delhi in the case of Commissioner of Income Tax Vs. Dinesh Jain HUF reported in 254 CTR (Del) 534, held:- Section 69B in terms requires that the Assessing Officer has to first find that the assessee has expended an amount which he has not fully recorded in his books of account. It is only then that the burden shifts to the assessee to furnish a satisfactory explanation. Till the initial burden is discharged by the Assessing Officer, the section remains dormant. A finding obviously should rest on evidence. In the present case, it is common ground that no incriminating material was seized during the search which revealed any understatement of the purchase e. That is precisely the reason why the Assessing Officer had to sort to Rule 3 of Schedule III to the Wealth Tax Act. This Rule does not even claim to estimate the fair market value of an asset; it merely lays down a procedure for computing the value of an asset for the purposes of the Wealth Tax Act. The Schedule derives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of any satisfactory explanation from the assessee as to the source of the undisclosed portion of the investment, can proceed to adopt some dependable or reliable yardstick with which to measure the extent of understatement of the investment. One such yardstick can be the fair market value of the property determined in accordance with the Wealth Tax Act. The error committed by the Income Tax authorities in the present case is to jump the first step in the process of applying section 69Bthat of proving understatement of the investment- and reply the measure of understatement. If anything, the language employed in section 69B is in stricter terms than the erstwhile section 52(2). It does not even authorize the adoption of any yardstick to measure the precise extent of understatement. There can therefore be no compromise in the application of the section. It would seem to require the Assessing Officer even to show the exact extent of understatement of the investment; it does not even give the Assessing Officer the option of applying any reasonable yardstick to measure the precise extent of understatement of the investment once the fact of understatement is proved. It a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was recorded by the Asstt. Director of IT (Inv.), on 18th Sept., 2001 in which he had deposed that he had sold the land in question @ ₹ 4 lacs per acre, and apart from the amount mentioned in the registered sale deed, he had received ₹ 72 lacs cash from the assessee in five installments. Undisputedly, said 'S' subsequently retracted from his statement the Asstt. Director of IT (Inv.) itself whereby he had confirmed that he had not received any amount over and above the consideration stated in the sale deed. Further, it is also undisputed position that before the Assessing Officer said 'S' did not appear and made any statement nor an opportunity was granted to the assessee to confront the sale deed and cross- examine 'S' on the statement which he had made before the Asstt. Director of IT (Inv.). In spite of allthis evidence, the Assessing Officer made the addition under section 69B only on the basis of conjectures while observing that it is a well known practice that the sale deeds of immovable properties are being registered at the much lower rates than the prevailing in the markets. It is also disputed fact that after selling of the land, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after examining the entire matter, observed that the statements given by Rajarathinam could not be relied upon more particularly as the floor price fixed by the authorities for such property was much lower than the value which would result if the sale deed had been registered at ₹ 34.85 lakhs. The CIT accordingly deleted the addition made. An appeal was thereafter preferred by the Revenue against the order of the CIT before the Tribunal. The Tribunal in its order dt. 6th July, 2005 held that the notings on the loose pieces of paper on the basis of which the initial suspicion with regard to the undervaluation had been raised were vague and could not be relied upon as it appeared that the total area with respect to the sale deeds and that reflected in the loose sheet was discrepant. It was also observed that as per the guidelines for registration the fair value for registration on the relevant date was ₹ 244 to ₹ 400 per sq. ft. and the sale consideration for ₹ 850 per sq.ft. claimed by the Revenue was unrealistic and ignored the ground situation. It was further held that the tax of approximately ₹ 1,84,000 determined on the basis of the addition would n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this matter and the issues raised were purely questions of fact. We have heard the learned counsel for the parties and have gone through the record. It is true that the Division Bench of the High Court has borrowed extensively from the orders of the Tribunal and the CIT and passed them off as if they were themselves the authors. We feel that quoting from an order of some authority particularly specialized one cannot per se be faulted as this procedure can often help in making for brevity and precision, but we agree with Mr. Vahanavati to the extent that any 'borrowed words' used in a judgment must be acknowledged as such in any appropriate manner as a courtesy to the true author(s). Be that as it may, we are of the opinion that the three questions reproduced above can, in no way, be called substantial questions of law. The fact as to the actual sale price of the property, the implication of the contradictory statements made by Rajarathinam or whether reliance could be placed on the loose sheets recovered in the course of the raid is all questions of fact. We therefore find no infirmity in the order of the High Court. Accordingly, we dismiss the appeal. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the agreement seized. (xxi) It is the burden of the department to prove under-statement of sale consideration. (xxii) This burden has not been discharged. (xxiii) There is no positive evidence against the assessee. (xxiv) Thus, the AO s presumption did not materialize into conclusive evidence against the assessee. (xxv) Such a presumption cannot be accorded the status of foolproof evidence against the assessee. (xxvi) Such a presumption cannot lead to a conclusion of under investment by the assessee, liable for addition. 9. The ld. CIT(A) has duly considered all the above said facts as well as the relevant case laws. There has been no effective rebuttal to the well reasoned elaborate findings recorded by the ld. CIT(A). 10. In view of the above discussion, we are of the considered view that the ld. CIT(A) has passed a detailed, well reasoned and well versed order, which does not require any interference and accordingly, the same is upheld. Ground no.1 is, thus, rejected. We find that the issues involved in these appeals is pari materia with the issue decided by Hon'ble Tribunal in the above noted cases and therefore resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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